Bipartisan talks falter; Boehner, Reid work on separate debt proposals

On Sunday, House Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) moved in different directions after efforts to broker a bipartisan agreement to raise the nation's debt ceiling ahead of the Aug. 2 deadline deadlocked.

On a conference call with House Republican lawmakers, Boehner called on the GOP to "stick together" in the debt-ceiling negotiations and outlined plans to present a proposal to the caucus on Monday.

Separately, Reid announced that he is drafting a $2.7 trillion deficit reduction package that would raise the debt ceiling enough to run through 2012. Reid said that talks on a bipartisan deal with Boehner "broke down."

Reid and Boehner's decision to pursue separate proposals with just eight days to go before the Treasury Department's deadline could leave them with little time to merge the measures and send them to the president.

Reid's announcement came after he joined House Minority Leader Nancy Pelosi (D-Calif.) for a meeting with President Obama in the Oval Office. Their meeting lasted for an hour and ended shortly after 7 p.m.

The Senate leader said his bill would meet the GOP’s criteria for approving a debt-ceiling increase: it will contain spending cuts that meet or exceed the additional authorization in federal borrowing, and it will not include new revenues, which Democrats have long demanded.

A Republican leadership aide explained to The Hill that Boehner's goal is to have a plan ready for discussion at a 2 p.m. closed-door meeting on Monday with GOP rank-and-file members, after which the legislative text would be posted Monday night. That could set up a vote on a yet-to-be-seen proposal by Wednesday.

The House Democratic Caucus will also meet Monday afternoon.

A source familiar with Boehner's remarks said the Speaker asked the rank-and-file to remain unified.

"I think the leaders in both parties and both houses of Congress already agree that we need significant reductions. But if we stick together, I think we can win this for the American people,” Boehner said.

Boehner told listeners on the GOP conference call that leaders are "committed to getting something done" and that he "believes there is a path" to do so in the next few days.

“I do think there is a path, but it’s going to require us to stand together as a team. It’s going to require some of you to make some sacrifices. If we stand together as a team, our leverage is maximized and they have to deal with us. If we’re divided, our leverage gets minimized," Boehner added during the call.

A participant on the call told The Hill that Boehner assured his colleagues that there were no "secretive negotiations going on a grand compromise."

"This White House doesn't want tax reform and we really have to have tax reform in order to have a grand deal put together," Boehner said.

House Majority Leader Eric Cantor (R-Va.) and Whip Kevin McCarthy (R-Calif.) excoriated the White House for playing politics with the debt limit, according to call participants.

Cantor told the rank-and-file listening in that "the president’s position of forcing us to give him a debt limit increase through the election is purely political and indefensible.  He cannot sustain or defend putting politics above the country’s interests in this situation."

McCarthy added, "You see the battle the Speaker is in. The president is throwing a fit because he’s worried about the election. He doesn’t want cuts, he wants increases. He lost his cool the other night because he knows he won’t get what he wants if we remain united," participants told The Hill.

Cantor asked for the patience of his conference and reiterated the need to stick together in the days ahead.

Cantor said that Obama "has the microphone. The only way to overcome him is to remain united and insist that every dollar the debt limit is increased, we have equal or more dollars in spending cuts without any tax hikes."

Calling it "a fluid situation," Cantor said, "Let’s stay united. We can do this."

During the call, Boehner also pointed fingers at the White House insistence on a full extension of the debt limit.

"It boils down to this: The president wants his $2.4 trillion debt limit increase all at once, without any guarantees that we’re going to cut more than $2.4 trillion in spending. The administration says they want it all up front so we don’t have to deal with this again until after the next election.  You heard the president say that himself on TV the other night," the Speaker said.

Boehner referenced the "cut, cap and balance" bill that passed in the House last week on a party-line vote but failed in the Senate.

He said Republicans need to rally behind a new "measure that has a shot at getting to the president’s desk" but added that a new measure "should be a package that reflects the principles of cut, cap and balance."

Freshman Rep. James Lankford (R-Okla.) said several members asked questions on the call while others spoke up simply to voice support for Boehner.

"It was very supportive of the Speaker," Lankford said in a phone interview, describing the sentiment of the Republicans who spoke on the call.

Lankford said he thought members were open to backing a short-term debt limit extension "as long as we're dealing with the long-term problem" of spending, he said. Obama has vowed to oppose a short-term hike.

Lankford said Boehner described negotiations as continuing principally with Senate leaders and said they were "changing minute by minute." The Speaker said there were multiple options on the table, Lankford said, but he did not detail them.

Lankford said Boehner did not say what he meant when he said some members would have to "make some sacrifices," but the Oklahoman said he took it as a reference to the fact that Republicans would have to vote once again to raise the debt ceiling, which many of them vowed never to do.

The Republican conference call and the Democrats’ meeting at the White House came during a weekend in which talks over raising the nation’s debt ceiling came to a standstill.

Boehner announced on Friday that he was walking away from negotiations with the White House, claiming that the president was “adamant” about raising taxes and that he would redirect his efforts to negotiating with Senate leaders.

Saturday, Boehner told GOP lawmakers that he was working to announce a proposal by a self-imposed 4 p.m. Sunday deadline before Asian markets opened for trading.

On Fox News Sunday, Boehner said “I would prefer to have a bipartisan approach to solve this problem. ... If that's not possible, I and my Republican colleagues are prepared to do this alone. Today.”

The Sunday 4 p.m. deadline passed with no announcement of a deal.

On Saturday, attention had shifted to a two-tiered approach to raising the debt ceiling and reducing the deficit. Under the plan, lawmakers would pass immediate spending cuts and raise the debt ceiling while also creating a process for Congress to enact entitlement and tax reforms over the next several months.

Pelosi acknowledged the proposal was on the table late Saturday night. “One option is to do something in two tiers, and I don’t think we can accomplish what we need to do in deficit reduction without revenues,” Pelosi said.

But on Sunday, administration officials dismissed the idea of a short-term debt-limit hike.

White House Chief of Staff William Daley said on NBC’s "Meet the Press" that the White House would veto such a bill and would not accept "some short-term gimmick where we're right back in this fix in six or eight months.”

—This story was published at 4:52 pm and has been updated.